Justdial.com investors eye US$1B IPO

A billion-dollar valuation for the Indian directories site will deliver riches to local investors entrepreneurs, with the impending IPO already billed as a watershed moment in the country's startup history.

Investors of Justdial.com are hoping for a billion-dollar valuation when the Indian directories Web site lists on the stock exchange, in what is heralded a watershed moment in the country's startup history.

In an interview with ZDNet, Deepak Srinath, founder of Bangalore-based investment bank Viedea, said the highly-anticipated Justdial.com initial public offer (IPO), which is over 10 years in the making, marks an important milestone as the first venture-backed technology startup in recent memory to list on the Indian stock exchange.

Srinath said almost US$100 million has been tipped into the Mumbai-based company, with the activity led by the two marquee investors: Sequoia Capital, which invested in Google, and Asian VC firm SAIF Partners. Founded by V.S.S Mani in 1994, the company had a directory listing of almost 7.7 million small businesses as of June last year, and over 22 million reviews and ratings.

If investors want to conjure the VC (venture capital) magic number of 10-times returns on investment, Srinath estimates Justdial.com's must secure a valuation of US$1 billion, which he deemed an achievable feat despite the "damp" enthusiasm.

"It's hard to tell [but] it's a good solid business, and retail investors like the story because Justdial.com is a very well-known brand. It has a decent shot at [getting] 700 million to a billion-dollar valuation," said Srinath, whose firm advises businesses on VC investments and mergers and acquisitions.

Justdial.com can be accessed via phone, wireless, and print media, he noted, adding that Indian investors will like the fact it is an "unsexy traditional business".

"It's not a platform business where they've built this cool technology that will make all the money. The skills they have are extremely people-oriented and very operationally intense and what they've done very well is manage these huge call center operations," he said.

Srinath said the company's long path to IPO reflected the realities of the Indian market, especially compared to the United States where startups as young as five years old will climb on board the Nasdaq. He added that it could eclipse the moment when MakeMyTrip listed on the aforementioned famous US tech stock exchange, because Justdial.com is a homegrown company joining the local stock exchange.

He said a successful IPO will inspire confidence in the Indian startup ecosystem, encouraging local and overseas institutional investors to up their commitment to the subcontinent. The financial windfall that will be returned to Justdial.com employees via stock options also will provide the seed capital for entrepreneurs to start the next generation of technology companies.

"Huge, huge, huge," Srinath said when asked about the potential impact. "Assuming the funds make money, they'll be more buoyant and the partners that manage the India fund can convince their overseas bosses to increase their investment."

Earlier this week local publication TechCircle reported that on March 20 the Securities and Exchange Board of India approved Justdial.com's application to conduct an IPO, however, the listing date has not been confirmed.